Tata Steel’s consolidated profits after tax plunged 43.4 per cent to ₹296 crore in the third quarter ended December 31 as margins at its European operations tumbled to a multi-year low, wrecking the gains from the strong performance at its India business.
Tata Steel’s Indian operation posted a PAT of ₹3,865 crore in Q3FY25 compared with ₹4,475 crore in the same period of the last fiscal, down 13.6 per cent.
Consolidated turnover of the company slipped 3 per cent to ₹53,648 crore in the third quarter compared with ₹55,312 crore in Q3FY24. Deliveries, however, increased to 7.72 million tonnes (mt), compared with 7.15 mt, up 8 per cent.
Turnover of the India business dropped 6 per cent to ₹32,930 crore.
The UK and the Netherlands continue to be a drag on the otherwise robust India business.
EBIDTA from the Netherlands stood at negative ₹1 crore while the UK EBIDTA loss was at ₹735 crore even as the company claimed that fixed cost, on an absolute basis, went down by £70 million following the closure of heavy end assets. EBIDTA from India stood at ₹7,820 crore.
Capex by Tata Steel in the quarter stood at ₹3,868 crore while it stood at ₹12,450 crore in the first nine months. T.V. Narendran, managing director and CEO of the company, said the growth plans in Kalinganagar are on course.
“The new blast furnace has produced 0.56 mt during the quarter and is ramping up to rated capacity. The continuous annealing line (CAL), which is a part of the 2.2 mt cold rolling mill complex, has been commissioned in December,” Narendran added, reminding that steel exports from China, which have averaged 9 million tonnes per month in 2024, dampened steel prices globally including in India.
Tata Steel’s net debt declined by around ₹3,000 crore from the September quarter to ₹85,800 crore on December 31.
Commenting on the business environment, Koushik Chatterjee, executive director and CFO of Tata Steel, said, “Both in the UK and the Netherlands, our performance has been adversely impacted by multi-year low market spreads, last seen in 2015-16. Despite this, UK EBITDA improved by £115 per tonne QoQ, primarily driven by fixed cost takeout upon closure of the heavy end assets by September 2024.”
The company has placed equipment orders for the 3mt electric arc furnace in the UK. Separately, it has started receiving equipment on site for the 0.85mt EAF in Ludhiana and is progressing with civil works.
“The ramp up of operations in Kalinganagar will help improve India cost profile upon fixed cost absorption,” Chatterjee said.